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Inside NVIDIA’s Revenue Growth Trend in Fiscal 2018

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NVIDIA’s double-digit revenue growth rate

NVIDIA (NVDA) has been witnessing strong double-digit YoY (year-over-year) revenue growth for almost two years, beating its own guidance by a huge margin. The YoY revenue growth was around 50% over the past four quarters, but it slowed to 32% in fiscal 3Q18, as the company was still ramping up the production of its Volta GPU (graphics processing unit).

NVIDIA is likely to maintain its double-digit growth trend in fiscal 4Q18 and throughout fiscal 2019, though its rate of growth will probably be lower than 50%.

NVIDIA’s fiscal 3Q18 revenue

The first full quarter sales of its Volta-based Tesla V100 GPU were visible in fiscal 3Q18, which saw NVIDIA’s data center revenues rise 20% sequentially. NVIDIA’s overall revenue rose 18% sequentially, or 32% YoY, to $2.6 billion, exceeding its own guidance of $2.3 billion by a margin of 11%.

NVIDIA posted a conservative guidance likely because it didn’t expect the cryptocurrency growth that it saw in fiscal 2Q18 to continue into fiscal 3Q18. But the weakness in cryptocurrency was partially offset by strong demand for Tegra processors by Japanese (EWJ) game console maker Nintendo for its Switch console. NVIDIA also saw strong growth in the data center segment.

NVIDIA’s revenue growth compared to peers

On the other hand, rival Advanced Micro Devices (AMD) posted a stronger sequential revenue growth of 34.4% as it benefitted from strong demand from crypto miners, who prefer AMD’s GPUs over NVIDIA. It also saw strong demand for its ultra-high-end Ryzen Threadripper CPUs (central processing units), which added to its sequential growth.

Intel’s (INTC) revenues rose 9% sequentially in fiscal 3Q17, largely driven by growth in its data-centric businesses. But its fiscal 3Q18 earnings show that NVIDIA’s competitors are slowly catching up, and this could very well slow its growth down in the near term.

In the next part, we’ll discuss what investors can expect from NVIDIA’s fiscal 4Q18 earnings.

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